The Canadian labor force changed direction after it had shown an improvement in September: according to the November 4th report, the employment fell during October by 54,000. All the decline in jobs were attributed to full time employment.
This decrease in employment augmented the rate of unemployment by 0.2 percent points as it reached 7.3% (see chart below).
This news is likely to affect forex exchange rate trading in Canada and may drive the USD/CAD forex exchange rate down throughout the day; if there will be good news from the U.S. labor report (to be published later on today), it may help further drive down the USD/CAD exchange rate. Currently the US dollar to Canadian dollar is traded at 1.0188 – a 1.19% increase as of 12:15 (GMT).
The table below shows announcements of the Canadian labor report in 2011, and the change in Canada’s employment (column A); Canada’s unemployment rate (column C), and the daily percent change on the day the report was published for USD/CAD (column D). Column B gives 1 for good news from the labor report (i.e. employment grew above 20k) and 0 for bad news (below 20k). The linear correlation of USD/CAD and Canadian labor report news shows a negative correlation, i.e. as the report shows bad news, the USD/CAD tends to rise (the Canadian dollar depreciates against the USD).
These correlations aren’t significant, but provide an indicator that the news on the Canadian labor force is likely to have a positive effect on the USD/CAD even in these uncertain times.
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